Active global containership fleet grows by 21 pc

The active global containership fleet has increased by 21 per cent from 11.55 million TEUs in January 2010 to 13.94 million TEUs at present after adding 1.39 million TEUs, involving the reactivation of 1.18 million TEUs of last year’s idle capacity, according to Alphaliner.

This has led to a decrease of idle capacity from its pinnacle of 1.51 million TEUs in January 2010 to 326,000 TEUs a year later. Scrapping and deletions have also contracted from 381,000 TEUs in 2009 to 184,000 TEUs in 2010.

But the fourth quarter of 2010 showed a slowdown in the growth of utilisation levels despite vigorous recovery in demand seen in the first three quarters.

Average utilisation levels on the main trade lanes fell from a ceiling of 95-100 per cent between May and August 2010 when shippers were confronted with capacity constraints between the Far East and the West, to a projected 80-85 per cent in December.

Growth rates slowed in December with Shanghai, the largest container port in the world now, posting a 3.2 per cent growth, and Singapore, the second-largest port, registered only a 3.8 per cent growth in their latest monthly reports.

In October, Alphaliner estimated idle fleet to increase to 700,000 TEUs at the end of 2010 for improving the supply-demand balance.

At the outset, the actual idle capacity did not even reach half of this figure because the carriers had been unwilling to reduce more capacity in the winter period. This resulted in a surplus.

Another effect of this was carriers’ failure to carry out their planned rate increases for a $ 200-300 per TEU on Asia-Europe trade and a peak season surcharge of $ 320/$ 400/$ 450 per TEU, FEU and 40-foot high cube respectively, on January 1, due to poor utilisation levels.

So far, carriers are paying attention to the expected increase in pre-Chinese New Year volumes in January to implement part of the rate increases.

Still, Alphaliner said carriers cannot maintain any rate increase in February because the current overcapacity conditions do not encourage this to happen.

The present market situation is opposite to the one a year ago. Carriers were then able to raise full rates on both the Asia-Europe and transpacific loops because of significant volume recovery after experiencing severe capacity decline in 2009.

Rates on all main trade lanes from the Far East are under pressure now because of overcapacity concerns, Alphaliner pointed out.

Such rate reductions are not only confined to Asia-Europe and North American strings now, but have spread to services to South America, Africa, Australia and the Middle East because of seasonal slowdown.

As a result, freight rates are expected to be soft for the whole 2011 as it is still doubtful whether carriers will have determination to reduce capacity.
(Source:www.transportweekly.com)